Jakarta peaks, Bangkok firm on rate cut hopes

SINGAPORE - Thailand’s stock index rose more than 2 percent to a 42-month high on Monday, and Indonesian shares closed at a life-high, as bank and energy shares gained from tame inflation data that boosted hopes of interest rate cuts.

By (Reuters)

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Published: Mon 2 Jul 2007, 4:54 PM

Last updated: Sat 4 Apr 2015, 10:11 PM

Indonesia’s main stock index rose 1.33 percent to a record 2,167.82 points, beating a previous peak of 2,167.451 points on June 26. Thailand’s SET index added 2.05 percent to 792.71 points, its highest since mid-January 2004.

Singapore’s Straits Times Index gained 0.06 percent, Malaysian stocks rose 0.74 percent and the Philippine index added 0.72 percent.

In Vietnam, the Ho Chi Minh stock index fell 2.98 percent, while the Hanoi Securities Trading Center dropped 10 percent. Dealers said the central bank ordered banks to limit lending to stock investors, in a bid to curb a soaraway market.

Indonesian stocks rallied on news that the country’s annual inflation eased last month, paving the way for an expected central bank rate cut this month.

‘It’s pretty much in line with expectations and one of the lowest figures we’ve had so far,’ said Rani Sofjan, research head of Mandiri Sekuritas. ‘It shows everything is under control on the macro side and we hope to see two more rate cuts this year.’

Bank Rakyat Indonesia rose 3.5 percent, Telkom Indonesia added 0.5 percent and Indosat gained 3.9 percent.

But Mandiri’s Sofjan added she believes there will be some profit-taking ahead of fund managers leaving for their summer holidays.

In Bangkok, Thailand’s Commerce Ministry said annual inflation was unchanged in June from May at 1.9 percent after a steady decline over a 5-month period to April.

‘There’s an added chance they’ll lower rates or, at the very least, keep it stable, and the market is taking it very, very positively,’ said Macquarie analyst Kitti Nathisuwan.

Rate-sensitive stocks such as Kasikornbank rose 3.4 percent and Bangkok Bank gained 2.6 percent.

Macquarie’s Nathisuwan said the Thai stock market will ‘continue to see a sustainable uptrend’ in the next few days.

Energy-related stocks such as PTT rose 3 percent and PTT Exploration & Production added 1.9 percent as oil prices remained high.

In Singapore, United Overseas Bank, Oversea-Chinese Banking Corp. and DBS Group Holdings led gains after a bullish report by Phillip Securities raised hopes of improving loan growth amid a construction and property boom.

UOB rose 0.9 percent, OCBC added 1.1 percent and DBS was up 0.9 percent.

In Manila, Bank of the Philippine Islands soared 5.1 percent and SM Prime Holdings jumped 6.4 percent.

‘The heavyweights were battered a lot last week and foreign funds are just sifting for bargains now,’ said Monique Lecaros, a dealer at SB Equities Inc.

In Kuala Lumpur, Bumiputra-Commerce Holdings, the country’s second-largest lender, rose 4.3 percent, while Malayan Banking Bhd gained 2.5 percent.

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